As is no doubt true of most Texas oil and gas attorneys, I’m always interested in reading about new developments in the oil and gas industry, although they often seem to attract more than their share of political wrangling. Of course, energy independence is a hot-button issue these days (see our recent post on the topic). Unfortunately, political posturing often gets in the way of common sense solutions to this pressing problem.
I was reminded of how politics is the enemy of practicality when I read an interview with Harold Hamm, CEO of Continental Resources in the Wall Street Journal recently. Continental Resources is the 14th largest oil company in the United States. Mr. Hamm is the man who discovered the Bakken oil fields in Montana and North Dakota, which he claims holds 24 billion barrels of oil, and that has already helped make America the world’s third largest oil producer. Mr. Hamm believes that energy independence is within our grasp.
New technological advances are helping the industry grow by leaps and bounds. Horizontal drilling allows economical access to oil reserves that would not have been possible in the past. It has done for oil production what fracing has done for natural gas. Mr. Hamm believes that America’s oil production and reserves will triple in the next five years, which will have a broad impact on the economy. There are 10 million royalty owners today who are earning money from the oil located beneath their land. These royalty owners are not the millionaire Wall Street investors that Obama is so fond of bashing, these are just folks, like you and me, using those royalties to pay help pay bills and to save for retirement.
But instead of investing and promoting the resurgence of this industry, which could create an untold number of good, well-paying American jobs, politics has once again interfered. Obama instead chooses to spend billions of taxpayer dollars on subsidies to companies touting green energy, which supplies only 2.5% of America’s energy needs. These types of energy sources may be useful in the future, but they are not feasible alternatives in the short term. In fact, for a number of reasons, these sources will never provide more than a few percent of our energy needs, no matter how much they are subsidized. Notwithstanding the facts, the Department of Interior continues to delay drilling permits month after month, preventing energy production to meet our needs today, preventing the creation of American jobs, and preventing payment of huge royalties to local, state and the federal government that would help with the current debt crisis.
Please don’t tell me that we need to subsidize these “green industries” to prevent pollution. Oil and gas companies spend billions of dollars every year to insure their operations do not polute and do not harm the environment. Those who say otherwise are, frankly, uninformed.
What is even more incredible than the misplaced subsidies is the length to which federal agencies go in harassing oil and gas companies. For example, the Justice Department has brought charges against Continental and six other oil companies for violating the Migratory Bird Act . The maximum penalty for each charge under this Act is six months in prison and a $15,000 fine. What was the heinous wrong that brought down the full force of the Justice Department on Mr. Hamm and his company? Well, a small bird, very common, and not an endangered species, was found dead in one of Continental’s oil pits in North Dakota. I love birds, and I believe that all life is sacred, but there is not even evidence that suggests the bird was killed by this pit.
This case seems even more far-fetched when one considers that some 440,000 birds die from the wind turbines every year, according to the American Bird Conservancy. So, you might ask, what is the Justice Department doing about this? Alas, wind energy is one of Obama’s political pet-projects, and the investors and officers of a number of these companies are major Obama supporters. I can find no record of any prosecution based on this law against wind energy companies.
The way Obama rewards his supporters with our tax money, while punishing the industries and companies that create jobs, appears to be cynical, cold-blooded, Chicago-style thug politics at its worst. I only hope enough voters perceive the insanity of this behavior between now and election day.